# Pricing formulas

Pricing formulas determine how the price is calculated and displayed on an invoice or receipt.

Rebilly supports five types of pricing: fixed-fee per time period, flat rate per unit, stair-step, tiered, and volume. For information on how to apply a pricing formula, see Create a product and pricing plan.

## Fixed-fee per period

Use this formula for subscriptions that involve the same price, number of units, and reoccur over a fixed period of time, such as every: day, week, month, year, or number of years.

For example, a streaming company charges customers $13.99 each month for subscription period that is 6 months in duration. The quantity of movies that a customer streams each month does not impact the price.

**Formula:** *unit quantity of 1* **x** *price per fixed time period* **x** *number of time periods* **=** final price.

## Flat rate per unit

Use this formula to charge a flat fee per unit. For example, $0.10 per transaction or $4 per unit.

**Formula:** *unit quantity* **x** *price per unit* **=** final price.

## Stair-step

Use this formula to charge for units that are sold in specific quantities.

For example, a company sells units in two specific quantities — in quantities of 12, and 6 units. In this scenario, a customer can only buy units in quantities of 12, or 6 units.

**Formula:** *price per specific quantity* **=** final price.

## Tiered

Use this formula to charge for units that are sold within defined quantity ranges, or tiers.

For example, a software company charges $15 per user, for a basic plan which provides 0 to 3 user licenses. If a customer adds one more user, the fee for this user is $20, because this new user exceeds the range of the basic plan. Additionally, if the customer adds a total of 6 or more users, the fee for the sixth user, and each user after that point, is $25.

Price per user | Tiers |
---|---|

$15 | 0 to 3 |

$20 | 4 to 5 |

$25 | 6 or more |

If a customer buys 6 user licenses on the tiered pricing plan, the pricing is as follows:

- User #1: $15
- User #2: $15
- User #3: $15
- User #4: $20
- User #5: $20
- User #6: $25

Total cost: $110.

**Formula:** (*price for the tier* **x** *quantity within the tier*) **+** (*price for next tier* **x** *quantity in next tier*) **+** ... **=** final price.

## Volume

Use this formula to charge for units that are sold in bulk, or volume ranges. In general, this formula means that a customer pays less per unit when they buy a large volume of units.

For example, based on the table below, if a customer buys 6 units, they pay $3 per unit. If a customer buys 1 unit, they pay $5.

Price per unit | Quantity range |
---|---|

$5 | 0 to 1 |

$4 | 2 to 5 |

$3 | 6 or more |

- Unit #1: $3
- Unit #2: $3
- Unit #3: $3
- Unit #4: $3
- Unit #5: $3
- Unit #6: $3

Total cost: $18.

**Formula:** *price per quantity range* **x** *number of units* **=** final price.